California finalizes climate rules
California approved landmark rules forcing major companies to disclose climate risks and emissions, creating new verification and governance obligations across audit, nom/gov and compensation committees reported. The move could set a de facto national standard for board oversight of climate metrics and executive incentives tied to climate performance.
The California Air Resources Board adopted the initial implementing regulations on Feb. 26, 2026, and will next submit that regulatory package to the state Office of Administrative Law for finalization. (sullcrom.com) CARB set the first SB‑253 deadline for Scope 1 and Scope 2 disclosures on Aug. 10, 2026, while Scope 3 reporting is scheduled to begin in 2027 under the statute. (gtlaw.com) SB‑253 applies to entities formed under U.S. law with global annual revenues exceeding $1 billion, and SB‑261 applies to entities with over $500 million in annual revenue; both statutes reach public and private companies “doing business in California.” (ww2.arb.ca.gov) The U.S. Court of Appeals for the Ninth Circuit granted an injunction pausing enforcement of SB‑261 on Nov. 18, 2025, and CARB has advised it will not enforce SB‑261 while that injunction remains in place. (sullcrom.com) CARB’s initial package removed a mandatory assurance requirement for the first SB‑253 reporting cycle, according to CARB staff summaries, but rulemaking documentation and practitioner guidance forecast phased third‑party assurance—moving from limited assurance toward reasonable assurance by 2030. (ey.com) SB‑219, signed into law on Sept. 27, 2024, amended the California climate laws and introduced a corporate governance certification requirement that explicitly covers audit‑committee processes, director nomination procedures, and compensation‑committee matters. (wsgr.com) CARB’s rulemaking ties compliance to enforcement and fees: administrative penalties for SB‑253 violations can reach up to $500,000 per reporting year while SB‑261 carries statutory penalties up to $50,000 per year, and CARB’s estimated 2026 administrative fees were roughly $3,106 for SB‑253 filers and $1,403 for SB‑261 filers. (pwc.com)
